News

Barnet Council facing £23m budget hole as pressures mount

Costs following the Covid-19 pandemic blamed amid wider economic turmoil, reports Simon Allin, Local Democracy Reporter

Hendon Town Hall
Hendon Town Hall

Barnet Council is working to close a £23million budget gap after its finance chief admitted the pressures facing the council are worse than predicted.

Town hall bosses expected the surge in costs following the Covid-19 pandemic to be a “one-off” but now realise the impact is “ongoing”, as the growing demand for social care plus higher inflation squeezes departmental budgets.

By law, councils have to balance their budgets. But three months into the financial year, Barnet’s adult social care department is forecasting a £14.4m overspend, largely because of an increase in placements, higher costs and more complex cases.

Children’s services is facing a £4.1m overspend, largely because of the greater use of independent fostering agencies, while an £8.4m budget gap for ‘customer and place’ is partly down to lost parking revenue as more people work from home following the pandemic.

Factoring in an underspend of around £4m on ‘strategy and resources’, the overall budget gap comes to £23.2m.

The figures are set out in a report that was presented to the council’s overview and scrutiny committee on Monday (4th). Dan Thomas, leader of the Conservative opposition group, told the meeting that the projected deficit was five times higher than the previous year and said it was “really worrying” that the report did not include a plan “to fix this massive overspend”.

Council leader Barry Rawlings said money had to be spent on statutory services such as adult and children’s care, adding that each department was working on an “action plan” to close the gap.

He said social care cases had become more costly after services were closed down during the Covid-19 pandemic, and blamed the Conservative government for “crashing the economy” and fuelling inflation.

Under questioning from Labour committee members, Cllr Rawlings said privately-run children’s homes had hiked prices by 25%, and in some cases the council was paying almost £500,000 per child for therapeutic services.

Under further questioning from the Conservatives, town hall finance chief Anisa Darr admitted the council had predicted “a more optimistic scenario” than turned out to be the case.

She explained that the increase in costs following the pandemic was expected to be a “one-off”, but it was now clear there would be an “ongoing” impact.

Anisa said the council would be “more pessimistic” in future and plan for “somewhere between realistic and worst-case [scenarios] just so we have got a buffer and we are not in this position again”.

The Tories also grilled the council leader on plans to hike electric vehicle charging costs by up to 22% and controlled parking zone (CPZ) permits by 10.5% from next year.

Cabinet member for environment and climate change Alan Schneiderman said the costs of energy had risen faster than inflation, and there was “a period when parking charges did not go up”. Cllr Rawlings cited “real cost recovery” as a reason for the CPZ increase.

Plans to bring down the deficit will be presented to a future meeting of the scrutiny committee.


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